He did not file any U.S. tax returns during this time as he was unaware of his obligation to continue to file in the U.S. even though he spent no time there.
Post the sale of his business he set up two discretionary trusts, 3 units trusts, a self managed superannuation fund and 15 investment companies.
When he engaged us, we started by quantifying his income tax and penalty exposure.
We then assessed how each of the 21 different entities within the group should be classified under U.S. tax law (i.e. grantor trust, partnership, disregarded entity or corporation) and strategized on the most effective way to optimize the use of foreign tax credits and the various attribution rules to reduce the exposure to unpaid tax, interest, and penalties.
In this particular case study we were successful in getting Mr Discoll in the Domestic Offshore Streamlined program and him obtaining a retroactive check the box election for a company that was out of time by 20 years. This resulted in a substantial reduction in the income tax due as we were able to offset foreign tax credits that would not have otherwise been available.